Reproducing the Issue

The Contact field is automatically populated with the Primary Contact of the Account ABC.

Now in the Account field, change the Account to Account DEF.

The Contact field does not get updated with the Primary Contact of the Account DEF.

Cause

Manual entries have higher priority than automated determination results, therefore a manually changed Contact is kept even when the Account is changed. Development have confirmed that they cannot change this logic as this would be incompatible for existing customers.